GST
Amendments carried out in the Finance Bill,
2021 will come into effect from the date when the same will be notified, as far
as possible, concurrently with the corresponding amendments to the similar Acts
passed by the States and Union territories with Legislature.
Proposed Amendments in the CGST Act, 2017
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Current provisions |
Proposed provisions |
Effect of changes made |
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Section 7(1) - Scope of supply –
Clause 99 of the Finance Bill, 2021 |
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After Section 7(1)(a): New clause to be
inserted “(aa) the activities or transactions, by a person,
other than an individual, to its members or constituents or viceversa, for
cash, deferred payment or other valuable consideration. Explanation.––For the purposes of this clause, it is
hereby clarified that, notwithstanding anything contained in any other law
for the time being in force or any judgment, decree or order of any Court,
tribunal or authority, the person and its members or constituents shall be
deemed to be two separate persons and the supply of activities or
transactions inter se shall be deemed to take place from one such person to
another” |
Seeks to insert a new clause (aa) to Section 7(1) of the CGST Act
to expand the scope of supply to include activities or
transactions of supply of goods or services or both by any person, other than
an individual, to its members or constituents or vice-versa. Therefore, this inclusion wants to done away the effect of
Hon’ble Supreme Court Judgment in State of West Bengal & Ors. v
Calcutta Club Limited [2019 (29) G.S.T.L. 545 (S.C.)] for erstwhile
Service tax regime wherein it was held that there cannot be the sale of goods
or provision of services between the unincorporated private
clubs/associations and its members owing to the principle of mutuality which
treats such clubs/associations and its members as the same person. Hence, this amendment is unsettling the settled jurisprudence
with retrospective date. This amendment shall take effect retrospectively from July 1,
2017. |
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Section 16(2) - Eligibility and
conditions for taking input tax credit – Clause 100 of the Finance Bill, 2021 |
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After clause (a), in sub-section (2) of
Section 16, the following clause shall be inserted: “(aa) the details of the invoice or debit note
referred to in clause (a) has been furnished by the supplier in the statement
of outward supplies and such details have been communicated to the recipient
of such invoice or debit note in the manner specified under section 37.” |
Seeks to insert a new sub clause (aa) after Section 16(2)(a) of
the CGST Act, 2017 (“CGST Act”) to provide that input tax credit (“ITC”)
on invoice or debit note may be availed only when the details of such invoice
or debit note have been furnished by the supplier in the statement of outward
supplies (GSTR-1) as specified in Section 37 of the CGST Act and such details
have been communicated to the recipient of such invoice or debit note. Comments: Thus, one more
condition is added for determining the eligibility of ITC. ITC would
not be available to the recipient if the details of such invoice or debit
note has been not furnished by the supplier in GSTR-1 or using IFF. In this regard it is important to note that Rule 36(4) of the
CGST Rules, 2017 (“CGST Rules”) was recently amended vide Notification
No. 94/2020-Central Tax dated December 22, 2020 w.e.f. January 01,
2021 to restrict the ITC to 5% in respect of invoices or debit notes not
furnished by supplier in GSTR-1 or using IFF. Therefore, this amendment seems to be providing statutory
backing to much debated Rule 36(4) of the CGST Rules. But even pre-GST legal jurisprudence supports the view that as
long as the purchasing dealer has taken all the steps required for being
eligible for ITC, he could not be expected to keep track of whether the
selling dealer has in fact deposited the tax collected with the government or
has lawfully adjusted it against his output tax liability - Arise India
Limited and Ors v. Commissioner of Trade & Taxes, Delhi and Ors [W.P.(C)
6093/2017 & connected matters dated 26.10.2017 - SLP filed by the revenue has been dismissed
with no discussions on merit by the Hon’ble SC in [Special Leave to Appeal
(C) No(s). 36750/2017 dated 10.01.2018]. Thus, this provision is still prone to litigation. |
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Section 35(5) - Accounts and other records – Clause 101 of the Finance Bill, 2021 |
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“S. 35 (5): Every registered person whose turnover during a
financial year exceeds the prescribed limit shall get his accounts audited by
a chartered accountant or a cost accountant and shall submit a copy of the
audited annual accounts, the reconciliation statement under sub-section (2)
of section 44 and such other documents in such form and manner as may be
prescribed.” |
Sub-section (5) of Section 35
shall be omitted
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Seeks to omit Section 35(5) of the
CGST Act so as to remove the mandatory requirement of getting annual accounts
audited by a chartered accountant or a cost accountant and reconciliation statement (GSTR-9C) to
be submitted for registered person whose turnover during a financial
year exceeds the prescribed limit, which is 2 Crore but for FY 2018-19 &
2019-20, notified as Rs. 5 Crore. |
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Section 44 - Annual return – Clause 102 of the Finance Bill, 2021 |
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“44. (1) Every registered person, other than an Input Service
Distributor, a person paying tax under section 51 or section 52, a casual
taxable person and a non-resident taxable person, shall furnish an annual
return for every financial year electronically in such form and manner as may
be prescribed on or before the thirty-first day of December following the end
of such financial year. Provided that the Commissioner may, on the recommendations of
the Council and for reasons to be recorded in writing, by notification,
extend the time limit for furnishing the annual return for such class of
registered persons as may be specified therein: Provided further that any extension of time limit notified by
the Commissioner of State tax or the Commissioner of Union territory tax
shall be deemed to be notified by the Commissioner. (2) Every registered person who is required to get his accounts
audited in accordance with the provisions of sub-section (5) of section 35
shall furnish, electronically, the annual return under sub-section (1) along
with a copy of the audited annual accounts and a reconciliation statement,
reconciling the value of supplies declared in the return furnished for the
financial year with the audited annual financial statement, and such other
particulars as may be prescribed. Explanation.- For the purposes of this section, it is hereby
declared that the annual return for the period from the 1st July, 2017 to the
31st March, 2018 shall be furnished on or before the 31st January, 2020 and
the annual return for the period from the 1st April, 2018 to the 31st March,
2019 shall be furnished on or before the 31st March, 2020.” |
Substituted as under: “44. Every registered person, other than an
Input Service Distributor, a person paying tax under section 51 or section
52, a casual taxable person and a non-resident taxable person shall furnish
an annual return which
may include a self certified reconciliation statement, reconciling the value
of supplies declared in the return furnished for the financial year, with the
audited annual financial statement for every financial year electronically,
within such time and in such form and in such manner as may be prescribed: Provided that the Commissioner may, on the
recommendations of the Council, by notification, exempt any class of
registered persons from filing annual return under this section: Provided further that nothing contained in this section
shall apply to any department of the Central Government or a State Government
or a local authority, whose books of account are subject to audit by the
Comptroller and AuditorGeneral of India or an auditor appointed for auditing
the accounts of local authorities under any law for the time being in force.” |
Seeks to substitute Section 44 of the
CGST Act so as to remove the mandatory
requirement of furnishing a reconciliation statement (GSTR-9C) duly audited
by practicing chartered accountant or cost accountant and to provide
for filing of the annual return (GSTR-9) on self-certification basis with
reconciliation statement,
reconciling the value of supplies declared in the return furnished for the
financial year, with the audited annual financial statement for every
financial year electronically, within such time and in such form and in such
manner as may be prescribed. Further, it is also provided that the
Commissioner may on recommendation of the GST Council may exempt a class
of registered persons from the filing the annual return. Comments: The
responsibility of reconciliation has been shifted to the taxpayers now
instead of GST auditors earlier. |
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Proviso to Section 50(1) - Interest on delayed payment of tax – Clause 103 of the Finance Bill, 2021 |
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“Provided that the interest on tax payable in respect of
supplies made during a tax period and declared in the return for the said
period furnished after the due date in accordance with the provisions of
section 39, except where such return is furnished after commencement of any
proceedings under section 73 or section 74 in respect of the said period,
shall be levied on that portion of the tax that is paid by debiting
the electronic cash ledger.” |
For the proviso to Section 50(1), the
following proviso shall be substituted and shall be deemed to have been
substituted with effect from the 1st day of July 2017: “Provided that the interest on
tax payable in respect of supplies made during a tax period and declared in
the return for the said period furnished after the due date in accordance
with the provisions of section 39, except where such return is furnished
after commencement of any proceedings under section 73 or section 74 in
respect of the said period, shall be payable on that portion of the tax
which is paid by debiting the electronic cash ledger.” |
Seeks to substitute proviso to Section 50(1) of the CGST Act so
as to charge interest only on net cash liability. This amendment shall take effect
retrospectively from July 1, 2017. Comments: Despite the 39th GST
Council’s recommendation in place with regard to imposing interest liability
retrospectively on net tax liability, the government still chose to appoint
01.09.2020 as the date when proviso to Section 50(1) of the CGST Act was made
effective. Though, press release and instructions were issued to clarify for
recovery of interest on net cash tax liability w.e.f. 01.07.2017, but still
litigations were seen. With this retrospective amendment, the
issue will now finally settle. |
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Amendment in Explanation 1(ii) to Section 74
- Determination of tax not paid or short paid or erroneously refunded or
input tax credit wrongly availed or utilised by reason of fraud or any
wilful-misstatement or suppression of facts – Clause 104 of the Finance Bill, 2021 |
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“(ii) where the notice under the same proceedings is issued to
the main person liable to pay tax and some other persons, and such
proceedings against the main person have been concluded under section 73 or
section 74, the proceedings against all the persons liable to pay penalty
under sections 122, 125, 129 and 130 are deemed to be concluded.” |
“(ii) where the notice under the same proceedings is issued to
the main person liable to pay tax and some other persons, and such
proceedings against the main person have been concluded under section 73 or
section 74, the proceedings against all the persons liable to pay penalty
under sections
122 and 125 are deemed to be concluded.” |
Seeks to amend Explanation 1(ii) of
Section 74 of the CGST Act so as to make seizure (Section 129) and
confiscation proceedings (Section 130) of goods and conveyances in transit a
separate proceeding from recovery of tax. Comments: Conclusion of proceedings u/s 73 or 74
will now mean conclusion of proceedings u/s 122 and 125 but not the
proceedings u/s 129 and 130. |
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Insertion of New Explanation in Section 75(12) - General
provisions relating to determination of tax – Clause 105 of the Finance Bill, 2021 |
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In Section 75(12), the following Explanation
shall be inserted: “Explanation.––For the purposes of this sub-section,
the expression "self-assessed tax" shall include the tax payable in
respect of details of outward supplies furnished under section 37, but not
included in the return furnished under section 39.” |
Seeks to insert an explanation under
Section 75(12) of the CGST Act to clarify that “self-assessed tax” shall include the tax payable
in respect of outward supplies furnished in GSTR 1 but not included in the return
furnished in GSTR 3B. Comments: The ambit of the term “self-assessed tax” is
proposed to be widened. Meaning thereby that now recovery can be initiated by
the officer even for the outward supply liability shown in the GSTR-1 filled
under Section 37. |
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Substitution of Sub-Section (1) in Section 83 - Provisional
attachment to protect revenue in certain cases – Clause 106 of the Finance Bill, 2021 |
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“(1) Where during the pendency of any proceedings under section
62 or section 63 or section 64 or section 67 or section 73 or section 74, the
Commissioner is of the opinion that for the purpose of protecting the
interest of the Government revenue, it is necessary so to do, he may, by
order in writing attach provisionally any property, including bank account,
belonging to the taxable person in such manner as may be prescribed.” |
“(1) Where, after the initiation of any proceeding
under Chapter XII, Chapter XIV or Chapter XV, the Commissioner is of the opinion that for the purpose of
protecting the interest of the Government revenue it is necessary so to do,
he may, by order in writing, attach provisionally, any property, including
bank account, belonging to the taxable person or any
person specified in sub-section (1A) of section 122, in such manner as
may be prescribed.” |
Seeks to substitute sub section (1) of Section 83 of the CGST
Act so as to provide that provisional attachment made to any
property, including bank account, belonging to a taxable person or any person
specified in Section 122(1A) of the CGST Act (i.e., person who causes to
commit specified offences and retains the benefit arising out of such
offences) shall remain valid for the entire period starting
from the initiation of any proceeding under Chapter XII- Assessment,
Chapter XIV- Inspection, Search, Seizure & Arrest, Chapter XV- Demand and
Recovery, till the expiry of a period of one year from the date of
provisional order made under Section 83(1) of the CGST Act. |
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Proviso to be inserted in Section
107(6) - Appeals to Appellate Authority – Clause 107 of the Finance Bill,
2021 |
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In Section 107(6), inserted following
proviso: “Provided that no appeal shall be filed against an
order under sub-section (3) of section 129, unless a sum equal to twenty-five
per cent. of the penalty has been paid by the appellant” |
Seeks to insert proviso under Section 107(6) of the CGST Act to
provide that an appeal against order passed in Section 129(3) of the
CGST Act i.e. in Form MOV-09 cannot be filed unless 25% of the penalty
has been paid by the appellant. Comments: Pre-deposit
requirement prior to this amendment was only to the extent of 10% of the
disputed tax liability which is now proposed to be 25% of the penalty amount
in case of detention and seizure of conveyance and goods during transit. |
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Clause (a) & (b) to be
substituted in sub section (1) of Section 129 - Detention, seizure and
release of goods and conveyances in transit – Clause 108 of the Finance Bill,
2021 |
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Sub-section
(1)(a) of Section 129: “(a) on payment of the applicable tax and
penalty equal to one hundred per cent. of the tax payable on such
goods and, in case of exempted goods, on payment of an amount equal to two
per cent. of the value of goods or twenty-five thousand rupees, whichever is
less, where the owner of the goods comes forward for payment of such tax and
penalty;” |
Sub-section
(1)(a) of Section 129: “(a) on payment of penalty equal to two hundred per cent. of the tax payable on such goods and, in case of
exempted goods, on payment of an amount equal to two per cent. of the value
of goods or twenty-five thousand rupees, whichever is less, where the owner
of the goods comes forward for payment of such penalty.” |
Seeks to increase the payment of penalty (previously
penalty and tax) from 100% to 200% for releasing of detained or
seized goods and conveyance. Previously, tax and penalty equal to 100% were to be paid for
release of detained or seized goods and conveyance. |
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Sub-section
(1)(b) of Section 129: (b) on payment of the applicable tax and penalty
equal to the fifty per cent. of the value of the goods reduced by the tax
amount paid thereon and, in case of exempted goods, on payment of an amount
equal to five per cent. of the value of goods or twenty-five thousand rupees,
whichever is less, where the owner of the goods does not come forward for
payment of such tax and penalty; |
Sub-section
(1)(b) of Section 129: (b) on payment of penalty equal to fifty per cent.
of the value of the goods or two hundred per cent. of
the tax payable on such goods, whichever is higher, and in case of exempted
goods, on payment of an amount equal to five per cent. of the value of goods
or twenty-five thousand rupees, whichever is less, where the owner of the
goods does not come forward for payment of such penalty; |
Seeks to change options for release of detained or seized
goods and conveyance for taxable goods where owner does not come forward: ·
Penalty equal
to 50% of value of goods; or ·
200% of tax
payable on such goods Whichever is higher. |
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Section
129(2): “The provisions of
sub-section (6) of section 67 shall, mutatis mutandis, apply for detention
and seizure of goods and conveyances.” |
Section 129(2) shall be omitted
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Seeks to provide that goods seized shall not be released
on provisional basis upon execution of a bond and furnishing of a
security, in such manner and of such quantum. Comments: This means that the penalty
imposed by the officer will have to be paid in cash by the taxpayer. |
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Section
129(3): “(3) The proper officer detaining
or seizing goods or conveyances shall issue a notice specifying the tax and
penalty payable and thereafter, pass an order for payment of tax and penalty
under clause (a) or clause (b) or clause (c).” |
Sub-section
(3) of Section 129: “(3) The proper officer
detaining or seizing goods or conveyance shall issue a notice within seven days of such detention or seizure,
specifying the penalty payable, and thereafter, pass an
order within a period of seven
days from the date of service of such notice, for
payment of penalty under clause (a) or clause
(b) of sub-section (1)” |
Seeks to amend Section 129(3) of the CGST Act to provide time
limit of 7 days’ notice of such detention or seizure, specifying the
penalty payable for issuance of MOV 07 and for passing an order in MOV 09
within a period of 7 days from the date of service of such MOV 07 under 129 (a)
and (b) of the CGST Act. |
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Section
129(4): “No tax, interest or
penalty shall be determined under sub-section (3) without giving the person
concerned an opportunity of being heard.” |
Section
129(4): “No penalty shall be determined under sub-section (3) without
giving the person concerned an opportunity of being heard.” |
Seeks to amend Section 129(4) of the CGST Act to provide that no
penalty shall be determined without opportunity of hearing where penalty is
payable on detention or seizure of goods and conveyance. Comments: It is to be
noted that tax and interest shall not be demanded after the amendment in law
for release of goods and conveyance. |
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Sub-section
(6) of Section 129: “(6) Where the person
transporting any goods or the owner of the goods fails to pay the amount of
tax and penalty as provided in sub-section (1) within fourteen days of such
detention or seizure, further proceedings shall be initiated in accordance
with the provisions of section 130: Provided that where the
detained or seized goods are perishable or hazardous in nature or are likely
to depreciate in value with passage of time, the said period of seven days
may be reduced by the proper officer.” |
Sub-section (6) of Section 129: “(6)
Where the person transporting any goods or the owner of such goods fails to
pay the amount of penalty under sub-section (1) within fifteen days from the date
of receipt of the copy of the order passed under sub-section (3), the goods
or conveyance so detained or seized shall be liable to be sold or disposed of
otherwise, in such manner and within such time as may be prescribed, to
recover the penalty payable under sub-section (3): Provided
that the conveyance shall be released on payment by the transporter of
penalty under sub-section (3) or one lakh rupees, whichever is less: Provided further that where the detained or seized goods are perishable
or hazardous in nature or are likely to depreciate in value with passage of
time, the said period of fifteen ays may be reduced by the proper officer.” |
Seeks to amend Section 129(6) of the CGST Act to delink
the proceedings under the section relating to detention, seizure and
release of goods and conveyances in transit, from the proceedings under Section
130 of the CGST Act for confiscation of goods or conveyances and levy of
penalty. Comments: Earlier the
provision was if person does not pay tax and penalty within 14 days of
seizure, the conveyance and goods detained were liable for confiscation as
per Section 130. But, after this amendment, the goods or conveyance detained
or seized shall become liable to be sold or disposed off in the manner
prescribed in case the payment of imposed penalty is not made within 15 days
from the date of receipt of copy of the order imposing such penalty. |
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Amendment in Section 130 -
Confiscation of goods or conveyances and levy of penalty - Clause 109 of the
Finance Bill, 2021 |
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Sub-section (1) of Section 130: “(1)
Notwithstanding anything contained in this Act, if any person- …………..” |
Sub-section (1) of Section 130: “(1)
Where, if any person- …………..” |
Seeks to amend Section 130 of the CGST Act to delink the
proceedings under that section relating to confiscation of goods or
conveyances and levy of penalty from the proceedings under Section 129 of the
CGST Act relating to detention, seizure and release of goods and conveyances
in transit. |
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Second Proviso to Section
130(2): “Provided further that the aggregate of such fine
and penalty leviable shall not be less than the amount of penalty leviable
under sub-section (1) of section 129” |
Second Proviso to Section
130(2): “Provided further that the aggregate of such fine
and penalty leviable shall not be less than the penalty equal to hundred per
cent. of the tax payable on such goods” |
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Sub-section (3) of
Section 130: “Where any fine in lieu of confiscation of goods or
conveyance is imposed under sub-section (2), the owner of such goods or
conveyance or the person referred to in sub-section (1), shall, in addition,
be liable to any tax, penalty and charges payable in respect of such goods or
conveyance.” |
Sub-section
(3) of Section 130 shall be omitted.
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Substitution of Section 151 - Power
to collect statistics - Clause 110 of the Finance Bill, 2021 |
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“(1) The Commissioner may, if he considers that it is necessary
so to do, by notification, direct that statistics may be collected relating
to any matter dealt with by or in connection with this Act. (2) Upon such notification being issued, the
Commissioner, or any person authorised by him in this behalf, may call upon
the concerned persons to furnish such information or returns, in such form
and manner as may be prescribed, relating to any matter in respect of which
statistics is to be collected.” |
“The Commissioner or an officer
authorised by him may, by an order, direct any person to furnish information
relating to any matter dealt with in connection with this Act, within such
time, in such form, and in such manner, as may be specified therein.” |
Seeks to substitute Section 151 of the CGST Act to empower
the jurisdictional commissioner to call for information from any
person relating to any matter dealt with in connection with the CGST Act. |
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Amendment of Section 152 - Bar on
disclosure of information - Clause 111 of the Finance Bill, 2021 |
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Section 152: “(1) No
information of any individual return or part thereof with respect to any
matter given for the purposes of section 150 or section 151 shall, without
the previous consent in writing of the concerned person or his authorised
representative, be published in such manner so as to enable such particulars
to be identified as referring to a particular person and no such information
shall be used for the purpose of any proceedings under this Act. (2) Except for the purposes of prosecution
under this Act or any other Act for the time being in force, no person who is
not engaged in the collection of statistics under this Act or compilation or
computerisation thereof for the purposes of this Act, shall be permitted to
see or have access to any information or any individual return referred to in
section 151.” |
Section 152: “(1) No
information |
Seeks to amend Section 152 of the CGST
Act to provide that no information obtained under Sections 150 (i.e., obligation
to furnish information return) and 151 (i.e., power to collect statistics) of
the CGST Act shall be used for the purposes of any proceedings under the Act without giving an
opportunity of being heard to the person concerned. |
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Amendment in Section 168(2) - Power
to issue instructions or directions - Clause 112 of the Finance Bill, 2021 |
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“The Commissioner
specified in clause (91) of section 2, sub-section (3) of section 5, clause
(b) of sub-section (9) of section 25, sub-sections (3) and (4) of section 35,
sub-section (1) of section 37, sub-section (2) of section 38, sub-section (6)
of section 39, sub-section (1) of section 44, sub-sections (4) and (5) of
section 52, sub-section (1) of section 143, except the second proviso
thereof, sub-section (1) of section 151, clause (l) of sub-section (3) of
section 158 and section 167 shall mean a Commissioner or Joint Secretary
posted in the Board and such Commissioner or Joint Secretary shall exercise
the powers specified in the said sections with the approval of the Board.” |
“The Commissioner
specified in clause (91) of section 2, sub-section (3) of section 5, clause
(b) of sub-section (9) of section 25, sub-sections (3) and (4) of section 35,
sub-section (1) of section 37, sub-section (2) of section 38, sub-section (6)
of section 39, section 44, sub-sections (4)
and (5) of section 52, sub-section (1) of section 143, except the second
proviso thereof, |
Seeks to amend Section 168 of the CGST
Act to enable the jurisdictional commissioner to exercise powers under
Section 44 (i.e., annual return) and omitted Section 151 of the CGST
Act (i.e., power to collect statistics) to call for information. |
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Retrospectively Deletion of
Paragraph 7 of Schedule II – Activities or Transactions to be Treated as
Supply of Goods or Supply of Services- Clause 113 of the Finance Bill, 2021 |
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Paragraph 7: “Supply of Goods: The
following shall be treated as supply of goods, namely:- Supply
of goods by any unincorporated association or body of persons to a member
thereof for cash, deferred payment or other valuable consideration.” |
Paragraph 7 shall be omitted and shall be deemed
to have been omitted with effect from the 1st day of July, 2017.
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Consequent to the insertion of
sub-clause (aa) in Section 7(1) of the CGST Act (supra), paragraph 7 of
Schedule II to the CGST Act is being omitted. Therefore, supply of goods by any
unincorporated association or body of persons to a member thereof for cash,
deferred payment or other valuable consideration will be treated as supply of
goods. This deletion was made to clarify that
there is levy of taxes on activities
or transactions of supply of goods or services or both by any person, other
than an individual, to its members or constituents or vice-versa for cash,
deferred payment or other valuable consideration. This amendment shall take effect
retrospectively from July 1, 2017. |
Proposed Amendments in the IGST Act, 2017
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Section 16 - Zero rated supply -
Clause 114 of the Finance Bill, 2021 |
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Current
provisions |
Proposed
provisions |
Effect of changes made |
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Section 16(1)(b): “Supply of goods or services or both to a Special
Economic Zone developer or a Special Economic Zone unit.” |
Section 16(1)(b): “Supply of goods or services or both for
authorised operations to a Special Economic Zone developer or a
Special Economic Zone unit.” |
Seeks to amend Section 16 of the IGST Act, 2017 (“IGST Act”)
to provide: ·
zero rated
supply of goods or services to a Special Economic Zone developer or a Special
Economic Zone unit only when the said supply is for authorised
operations; ·
restrict the zero-rated supply on payment of integrated tax only to a
notified class of taxpayers or notified supplies of goods or services; and ·
link non
realization of sales proceeds of goods exported liable for refund so received along with interest within 30 days after
expiry of specified time limit prescribed under FEMA for receipt of sales
proceeds. Comments: Seemingly, now only notified class of taxpayer or notified class of
goods/services will be eligible for claiming refund of IGST paid on
zero-rated supplies, unlike present provision which allows both the options
to all persons subject to Rule 96(10) of the CGST Rules. Other option left will be to claim refund of unutilized ITC. |
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Sub-section (3) of
Section 16: “(3) A registered person making zero rated supply
shall be eligible to claim refund under either of the following options,
namely:–– (a) he may supply goods or services or both under
bond or Letter of Undertaking, subject to such conditions, safeguards and
procedure as may be prescribed, without payment of integrated tax and claim
refund of unutilised input tax credit; or (b) he may supply goods or services or both,
subject to such conditions, safeguards and procedure as may be prescribed, on
payment of integrated tax and claim refund of such tax paid on goods or
services or both supplied” |
For
Sub-section (3) of Section 16, the following Sub-sections shall be substituted: “(3) A registered person making zero rated supply
shall be eligible to claim refund of unutilised input tax credit on supply of
goods or services or both, without payment of integrated tax, under bond or
Letter of Undertaking, in accordance with the provisions of section 54 of the
Central Goods and Services Tax Act or the rules made thereunder, subject to
such conditions, safeguards and procedure as may be prescribed: Provided that the registered person making zero rated
supply of goods shall, in case of non-realisation of sale proceeds, be liable
to deposit the refund so received under this sub-section along with the
applicable interest under section 50 of the Central Goods and Services Tax
Act within thirty days after the expiry of the time limit prescribed under
the Foreign Exchange Management Act, 1999 for receipt of foreign exchange
remittances, in such manner as may be prescribed. (4) The
Government may, on the recommendation of the Council, and subject to such
conditions, safeguards and procedures, by notification, specify–– (i) a class of persons who may make zero rated supply
on payment of integrated tax and claim refund of the tax so paid; (ii) a class of goods or services which may be
exported on payment of integrated tax and the supplier of such goods or
services may claim the refund of tax so paid.” |
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COMMENTS